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If you run a website and would like to make money by putting some affiliate commission-based advertising on it, you may notice that there are many different affiliate marketing companies, and also there are companies who have their own independent affiliate programs too, for example with Kowabunga. As an affiliate of some experience I thought it would be nice if I share the knowledge I have of good and bad practice I have seen in the affiliate marketing business. With independent affiliate programs you have to consider them on their own merits, for example most gambling casinos have their own contracts. But a great many companies work with affiliate marketing companies who do all the affiliate tracking for a whole set of merchants and affiliates. This is good because of the economies of scale and for various other reasons, and here are a few aspects which in my opinion show good and bad practice:
Centralised accounting. Most companies will do all the accounting for you and tot up all the commissions from all the merchants you are with. This is good. The bad approach is to have all the merchants totted up separately, in which case you have to achieve the threshold level on EACH merchant in order to get paid!
Automatic acceptance. In my view there has to be a good reason for refusing an affiliate. I regard affiliate refusing as a very dodgy thing anyway, rather like a shop refusing to serve some customers because of the colour of their skin/hair. Why do merchants ever refuse affiliates?. Therefore it's best to choose affiliate companies who will automatically accept anyone who is prepared to sell for them. To get an idea of the prejudice aspects, see the judging page and the regionalisation assumption
Tracking code. It's best if this is anybrowser-compatible, contains no cookies or 1x1 gifs, preferably is without ampersands, and there is proper generic text-only option. (Text links can always be used with a banner, but not vice-versa). The more generic the code, the easier it is to implement by the affiliate. It's also good if deep linking is allowed.
Contract. There should be only one contract for the entire affiliate company. If affiliates are expected to read and sign a separate contract for each merchant it becomes impractical, and it would be better if the companies all had their own independent affiliate programs! You SHOULD read all the smallprint, for example to avoid really stupid things like "you agree that we shall be the exclusive merchant at your site" etc, so any extra contract-reading should be kept to a minimum. See Unfair clauses in contracts to avoid. Changes in contracts should be published by e-mailing everyone, not just by changing the contract at the site, as it's unreasonable to expect affiliates to keep checking the contracts all the time just to see if they've been changed! Also, the contract should be reasonable, not long-winded, and should include reciprocity, ie not be a totally unfair one-sided setup. To see an example of the kind of thing to avoid, read the appalling bureaucratic contract of Linkshare, which is exactly the wrong way to do it!
Payments. Payments should be to an optional "payee" which is allowed to be different from the main company identity. Minimum payments are ok, but all small payments should always roll-over indefinitely until the appropriate threshold has been reached. However it is arranged and agreed, affiliates should never forfeit payments through being a bit slow or underperforming. We all have to start somewhere and it's best to show sympathy for those who are just starting.
Good communication. It's important to be able to be in contact with the people at the affiliate company. If you are an affiliate you should avoid places that will not bother to reply to your e-mail. To test this, it's best to send an interesting question to a company before joining and see if you get a proper reply.
Quality of the Merchants. There's nothing wrong with an affiliate marketing company having a few spivvy merchants on the books, after all it takes all types in business. However, it gets a bit worrying if an affiliate company is stuffed full of MLM, get rich schemes, questionable medical treatments, porno, and offers which make extravagant claims. It's best if there is a sensible balance with a reasonable ratio of reliable stable merchants and more maverick lines. Having said that, it's also best if it's not too snooty either, and allows a wide diversity.
SPAM. An affiliate company should not have a zero tolerance of spam, but should settle for the affiliate not promoting that affiliate company's merchants in any spam! In a similar way, it's reasonable for a company to expect you to agree to refrain from smoking while in their building, but it's not reasonable for a company to expect you to sign a pledge to give up smoking!
Odd rules. Whatever rules there are should be made clear, and not be arbitrary. Reasonableness is important. There should be no nasty surprises for transgression of unseen rules. Also, mistakes and imagined mistakes should be reversible and there should not be something that looks like a school black-mark record!
Affiliate recruiter bonus. An affiliate company should always have an affiliate program with itself, for the recruiting of new affiliates and also new merchants. This can take the form of bounty or second-tier commission. This encourages new people to join in. Revenue Share is best. There are issues to do with this which you can see explained in the pros and cons of having an affiliate recruiter program
Long-termist reliable marketing preference. (sometimes termed SEO v PPC). An affiliate marketing company should support and encourage good reliable affiliates who create long-term prevailing dedicated pages with relevant content, rather than PPC (pay per click), spam, pop-ups, and other types of splat advertising. Quality is what matters, not quantity of impressions. We the affiliates who create solid web material that's built to last are still going to be around long after the short term silliness of splat advertising is discredited. If you're an affiliate marketing merchant, you should be looking for long term relationships, if you want to still be in business in years to come. Affiliate marketing companies who recognise this fact ahead of the rest of the field have an advantage and are likely to still be with us in ten years' time. Also see no ppc and no incentivised leads. Who knows, next it will be no voucher codes?! Long term continuity of merchant affiliate programs is important, so capped programs aren't a good idea!
Expired affiliate merchant arrangements. If an affiliate merchant's affiliate program ends, it should stay recorded at the affiliate marketing company that the affiliate program WAS there. This enables affiliates to keep track of expired programs properly. Positive information about the disappearance of an affiliate program is much better than it just "disappearing" and being mysteriously absent. Also, what happens to expired links? Do they just go through and leave affiliates working for nothing? Or do they come up with "expired"? The best scheme on this is at ClickXchange where the visitors are redirected to a page of the affiliate's choice specified in the affiliate account preferences, eg http://www.affiliate website.net/whoops.htm . Another good one is at CJ where the affiliate can review invalid links generating traffic.
Leakiness. Some affiliate marketing companies "leak like a sieve", either by having security holes in the merchant arrangements where circumvention occurs, or where there are phone numbers on the merchant sites even when visitors link through an affiliate link, or by merchants being victim to fraudulent leads. These problems can be eliminated by good practice and there is a lot to be said for road-testing the system.
All-inclusiveness. Questions of "streamlining". It's important to be fair to everyone. There are always going to be some small affiliates whose clicks and sales performance figures are going to be minimal. No-one should be "streamlined out" or in other ways prejudiced against just because they don't fit in with an elitist notion of supporting "only the top affiliates". Flat-rate percentages are best. See Being Fair to All Affiliates
These are guidelines to good practice at affiliate marketing companies, as seen from the viewpoint of an affiliate. If you run an affiliate marketing company, you can check to see how your company shapes up. Don't worry if you don't pass on every score - no company I know gets everything right on this! However, some are better than others! The idea of publishing this guide to good practice is to encourage good practice and to help to avoid bad mistakes being propagated, especially where with a bit of thought and good planning, mistakes and bad practice can be avoided.
If you're considering setting up a new affiliate marketing company, this set of guidelines is a good start! Of course you've also got to keep the merchants happy, and make a profit as well! It's a market which already has some major players in it (see affiliate marketing companies list), but the available market is so big that there is plenty of room for new companies to start!
Centralised accounting. Most companies will do all the accounting for you and tot up all the commissions from all the merchants you are with. This is good. The bad approach is to have all the merchants totted up separately, in which case you have to achieve the threshold level on EACH merchant in order to get paid!
Automatic acceptance. In my view there has to be a good reason for refusing an affiliate. I regard affiliate refusing as a very dodgy thing anyway, rather like a shop refusing to serve some customers because of the colour of their skin/hair. Why do merchants ever refuse affiliates?. Therefore it's best to choose affiliate companies who will automatically accept anyone who is prepared to sell for them. To get an idea of the prejudice aspects, see the judging page and the regionalisation assumption
Tracking code. It's best if this is anybrowser-compatible, contains no cookies or 1x1 gifs, preferably is without ampersands, and there is proper generic text-only option. (Text links can always be used with a banner, but not vice-versa). The more generic the code, the easier it is to implement by the affiliate. It's also good if deep linking is allowed.
Contract. There should be only one contract for the entire affiliate company. If affiliates are expected to read and sign a separate contract for each merchant it becomes impractical, and it would be better if the companies all had their own independent affiliate programs! You SHOULD read all the smallprint, for example to avoid really stupid things like "you agree that we shall be the exclusive merchant at your site" etc, so any extra contract-reading should be kept to a minimum. See Unfair clauses in contracts to avoid. Changes in contracts should be published by e-mailing everyone, not just by changing the contract at the site, as it's unreasonable to expect affiliates to keep checking the contracts all the time just to see if they've been changed! Also, the contract should be reasonable, not long-winded, and should include reciprocity, ie not be a totally unfair one-sided setup. To see an example of the kind of thing to avoid, read the appalling bureaucratic contract of Linkshare, which is exactly the wrong way to do it!
Payments. Payments should be to an optional "payee" which is allowed to be different from the main company identity. Minimum payments are ok, but all small payments should always roll-over indefinitely until the appropriate threshold has been reached. However it is arranged and agreed, affiliates should never forfeit payments through being a bit slow or underperforming. We all have to start somewhere and it's best to show sympathy for those who are just starting.
Good communication. It's important to be able to be in contact with the people at the affiliate company. If you are an affiliate you should avoid places that will not bother to reply to your e-mail. To test this, it's best to send an interesting question to a company before joining and see if you get a proper reply.
Quality of the Merchants. There's nothing wrong with an affiliate marketing company having a few spivvy merchants on the books, after all it takes all types in business. However, it gets a bit worrying if an affiliate company is stuffed full of MLM, get rich schemes, questionable medical treatments, porno, and offers which make extravagant claims. It's best if there is a sensible balance with a reasonable ratio of reliable stable merchants and more maverick lines. Having said that, it's also best if it's not too snooty either, and allows a wide diversity.
SPAM. An affiliate company should not have a zero tolerance of spam, but should settle for the affiliate not promoting that affiliate company's merchants in any spam! In a similar way, it's reasonable for a company to expect you to agree to refrain from smoking while in their building, but it's not reasonable for a company to expect you to sign a pledge to give up smoking!
Odd rules. Whatever rules there are should be made clear, and not be arbitrary. Reasonableness is important. There should be no nasty surprises for transgression of unseen rules. Also, mistakes and imagined mistakes should be reversible and there should not be something that looks like a school black-mark record!
Affiliate recruiter bonus. An affiliate company should always have an affiliate program with itself, for the recruiting of new affiliates and also new merchants. This can take the form of bounty or second-tier commission. This encourages new people to join in. Revenue Share is best. There are issues to do with this which you can see explained in the pros and cons of having an affiliate recruiter program
Long-termist reliable marketing preference. (sometimes termed SEO v PPC). An affiliate marketing company should support and encourage good reliable affiliates who create long-term prevailing dedicated pages with relevant content, rather than PPC (pay per click), spam, pop-ups, and other types of splat advertising. Quality is what matters, not quantity of impressions. We the affiliates who create solid web material that's built to last are still going to be around long after the short term silliness of splat advertising is discredited. If you're an affiliate marketing merchant, you should be looking for long term relationships, if you want to still be in business in years to come. Affiliate marketing companies who recognise this fact ahead of the rest of the field have an advantage and are likely to still be with us in ten years' time. Also see no ppc and no incentivised leads. Who knows, next it will be no voucher codes?! Long term continuity of merchant affiliate programs is important, so capped programs aren't a good idea!
Expired affiliate merchant arrangements. If an affiliate merchant's affiliate program ends, it should stay recorded at the affiliate marketing company that the affiliate program WAS there. This enables affiliates to keep track of expired programs properly. Positive information about the disappearance of an affiliate program is much better than it just "disappearing" and being mysteriously absent. Also, what happens to expired links? Do they just go through and leave affiliates working for nothing? Or do they come up with "expired"? The best scheme on this is at ClickXchange where the visitors are redirected to a page of the affiliate's choice specified in the affiliate account preferences, eg http://www.affiliate website.net/whoops.htm . Another good one is at CJ where the affiliate can review invalid links generating traffic.
Leakiness. Some affiliate marketing companies "leak like a sieve", either by having security holes in the merchant arrangements where circumvention occurs, or where there are phone numbers on the merchant sites even when visitors link through an affiliate link, or by merchants being victim to fraudulent leads. These problems can be eliminated by good practice and there is a lot to be said for road-testing the system.
All-inclusiveness. Questions of "streamlining". It's important to be fair to everyone. There are always going to be some small affiliates whose clicks and sales performance figures are going to be minimal. No-one should be "streamlined out" or in other ways prejudiced against just because they don't fit in with an elitist notion of supporting "only the top affiliates". Flat-rate percentages are best. See Being Fair to All Affiliates
These are guidelines to good practice at affiliate marketing companies, as seen from the viewpoint of an affiliate. If you run an affiliate marketing company, you can check to see how your company shapes up. Don't worry if you don't pass on every score - no company I know gets everything right on this! However, some are better than others! The idea of publishing this guide to good practice is to encourage good practice and to help to avoid bad mistakes being propagated, especially where with a bit of thought and good planning, mistakes and bad practice can be avoided.
If you're considering setting up a new affiliate marketing company, this set of guidelines is a good start! Of course you've also got to keep the merchants happy, and make a profit as well! It's a market which already has some major players in it (see affiliate marketing companies list), but the available market is so big that there is plenty of room for new companies to start!
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